Procurement Policy 2021 2025 - Engage Frankston!
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Procurement Policy 2021 – 2025 (A4492229) __________________________________________________________________________________________ Responsible directorate: Chief Financial Officer Authorised by: Council Resolution Date of adoption: To be determined Review date: Next review to be completed by November 2025 (Note that the Local Government Act (Vic) 2020 requires that a Council must review its Procurement Policy at least once during each 4 year term of the Council.
CONTENTS
CONTENTS ...................................................................................................................................................................................... 2
1. Authorisation ................................................................................................................................................................ 4
2. Document history ......................................................................................................................................................... 4
3. Definitions..................................................................................................................................................................... 4
4. Overview ....................................................................................................................................................................... 6
5. Purpose ......................................................................................................................................................................... 6
6. Scope ............................................................................................................................................................................ 6
7. Policy non-compliance .................................................................................................................................................. 7
8. Principles....................................................................................................................................................................... 7
9. Delegations ................................................................................................................................................................... 7
10. Probity and ethics ......................................................................................................................................................... 7
10.1 Conduct of Councillors and Council Staff...................................................................................................................... 7
10.2 Councillors’ roles in procurement activities ................................................................................................................. 8
10.3 Conflict of interest ........................................................................................................................................................ 8
10.4 Open and fair competition ........................................................................................................................................... 9
10.5 Probity, accountability and transparency ..................................................................................................................... 9
10.6 Gifts, benefits and hospitality ....................................................................................................................................... 9
10.7 Disclosure of information ............................................................................................................................................. 9
10.8 Charter of Human Rights ............................................................................................................................................ 10
11. Governance ................................................................................................................................................................. 10
11.1 Structure ..................................................................................................................................................................... 10
11.2 Controls....................................................................................................................................................................... 10
11.3 Financial accountability .............................................................................................................................................. 10
11.4 Internal compliance reporting .................................................................................................................................... 11
12. Procurement thresholds ............................................................................................................................................. 11
12.1 Contract value thresholds and procurement requirements ....................................................................................... 11
12.2 Exemptions from competitive procurement processes ............................................................................................. 12
12.3 Procurement during an emergency ............................................................................................................................ 14
12.4 Purchase order requirements ..................................................................................................................................... 14
12.5.1 Exemptions from raising Purchase Orders .................................................................................................................. 14
12.6 Probity planning.......................................................................................................................................................... 14
12.7 Cumulative spend thresholds ..................................................................................................................................... 15
12.8 Contract variations ..................................................................................................................................................... 15
12.8.1 Approving contract variations .................................................................................................................................... 15
13. Procurement processes .............................................................................................................................................. 16
13.1 Public notice and communication .............................................................................................................................. 16
13.2 Market engagement ................................................................................................................................................... 16
13.3 Specifications / project brief ....................................................................................................................................... 17
13.4 Late responses ............................................................................................................................................................ 17
2
13.5 Evaluation criteria for Value for Money ..................................................................................................................... 17
13.5.1 Minimum criteria weighting ....................................................................................................................................... 17
13.5.2 Mandatory criteria ...................................................................................................................................................... 18
13.6 Evaluation of tenders and EOIs ................................................................................................................................... 18
13.7 Confidentiality ............................................................................................................................................................ 18
13.8 Shortlisting and negotiations ...................................................................................................................................... 19
13.9 Award of contract ....................................................................................................................................................... 19
13.10 Panel arrangement ..................................................................................................................................................... 19
14. Collaborative Procurement Arrangements ................................................................................................................. 20
15. Community benefit ..................................................................................................................................................... 21
15.1 Economic sustainability .............................................................................................................................................. 21
15.2 Environmental sustainability ...................................................................................................................................... 21
15.3 Social procurement ..................................................................................................................................................... 22
16. Risk management ....................................................................................................................................................... 23
16.1 Child Safe Standards ................................................................................................................................................... 23
16.2 Occupational Health and Safety ................................................................................................................................. 23
16.3 Supplier Code of Conduct ........................................................................................................................................... 23
17. Contract management ................................................................................................................................................ 24
18. Reporting fraud and complaints ................................................................................................................................. 24
19. Administrative matters ............................................................................................................................................... 24
20. Procurement Policy and Process Enquiries................................................................................................................. 24
3
1. Authorisation
This Policy is managed by the Procurement, Property and Risk Department, and is approved by Frankston City’s
Mayor and Council’s Chief Executive Officer (CEO):
--------------------------------------- ----------------------------------------
Mayor, Frankston City Council CEO, Frankston City Council
in accordance with Frankston City Council resolution at its Ordinary Council meeting of TBD.
2. Document history
Version Date adopted by Council
Version 1 6 June 2016
Version 2 11 December 2017
Version 3 23 July 2018
Version 4 22 July 2019
Version 5 31 August 2020
Version 6 TBD October 2021
3. Definitions
Term Definition
Aboriginal Business An Aboriginal Business, as defined by the Victorian Government, means a
business that is:
at least 50% Aboriginal and/or Torres Strait Islander-owned;
undertaking commercial activity; and
mainly located in Victoria
The Aboriginal Business sector includes for-profit businesses, Traditional Owner
corporations, Social Enterprises and community enterprises in metropolitan
and regional areas.
Act Local Government Act 2020 (Vic)
Australian Disability Enterprises Commonwealth-funded and generally not-for-profit organisations operating in a
commercial context, specifically to provide supportive employment opportunities
to people with moderate to severe disability. Some Australian Disability
Enterprises also operate as Social Enterprises. Under the Social Procurement
Framework, the Victorian Government encourages engagement with Victorian
Australian Disability Enterprises that offer award based pay rates for all staff.
Category A segment of expenditure which contain similar or related products, enabling
focus opportunities for consolidation and efficiency.
Collaborative Procurement A contract or other arrangement established by Council, a government body or a
Arrangement nominated agent, such as Procurement Australasia (PA), Municipal Association of
Victoria (MAV), South Eastern Metro Regional Procurement Network (SEMRPEN)
or a local government entity, for the benefit of numerous state, federal and/or
local government entities that achieves best value by leveraging combined
economies of scale.
4Term Definition
Commercial in Confidence Information that, if released, may prejudice the business dealings or commercial
Information interests of Council or another party, e.g. prices, discounts, rebates, profits,
methodologies and process information, etc.
Contract Management The process that ensures all parties to a contract fully meet their respective
obligations as efficiently and effectively as possible, in order to deliver the
contract objectives and provide Value for Money.
Council Frankston City Council
Councillors Council’s elected representatives (the Mayor and Councillors) or administrator(s)
(as the case may be) appointed to act in this capacity.
Council Staff Includes all Council officers, temporary employees, contractors, volunteers and
consultants while engaged by Council.
EMT Council’s Executive Management Team, consisting of Council’s Directors and
Council’s CEO
Local Supplier Local suppliers are defined as businesses that are either based in the south-east
region of Melbourne, perform the majority of their operations in this region or
employ a significant number of local residents in their business.
Material Breach Any breach of this policy that may also represent a breach of legislation or policy
such as tendering thresholds, fraud or corruption, and occupational health and
safety.
Probity Within local or state government, the term "probity" means in a general sense
"good process”. A procurement process that conforms to the expected standards
of Probity is one in which clear procedures that are consistent with Council’s
policies and legislation, are established, understood and followed from the
outset. These Probity procedures need to consider the legitimate interests of
ratepayers and suppliers and ensure that all potential suppliers are treated
equitably.
Regulations Any applicable regulations in force from time to time under the Act.
Social Enterprise Businesses that trade to intentionally tackle social problems, improve
communities, provide people access to employment and training, or help the
environment. They derive most of their income from trade (not donations or
grants) and use the majority of their profits (at least 50%) to contribute to their
social mission.
Among other benefits, Social Enterprises play an important role in providing
transitional employment for disadvantaged job seekers, including people with
disability, as a pathway to employment in mainstream businesses. Social
Enterprises can also provide ongoing employment options for disadvantaged job
seekers who may not be well placed to sustain mainstream employment over the
longer term.
Supplier Code of Conduct Council’s Supplier Code of Conduct sets out the standards of behaviour that a
supplier agrees to aspire to when engaged by Council.
Sustainability An approach whereby activities can meet the needs of the present without
compromising the ability of future generations to meet their needs.
Tender Process The process of inviting parties from either a select list or via public advertisement
to submit an offer by tender followed by evaluation of submissions and selection
of one or more successful bidders or tenderers in accordance with pre-
determined evaluation criteria.
Value for Money The best mix of cost, quality (i.e. ability to meet user requirements) and
Sustainability (environmental, social and economic). The lowest price will not
necessarily represent Value for Money.
54. Overview
This Procurement Policy is made under section 108 of the Act. The Act requires each council to (amongst other
things):
prepare, adopt and comply with a procurement policy which specifies the principles, processes and
procedures applying to all purchases of goods and services and carrying out of works by the council to
promote open and fair competition and provide value for money;
establish the thresholds and processes for public procurements;
provide for collaboration in procurement with other councils or public bodies; and
review its procurement policy at least once during each 4-year term of the council.
5. Purpose
The purpose of this Procurement Policy is to aim to:
establish a procurement framework to achieve continual improvement and Value for Money in the timely
acquisition of goods, works and services;
ensure consistency, control and best practice over procurement activities;
ensure Council resources are used efficiently and effectively to improve the overall quality of life of people
in the local community;
support the achievement of Council’s strategies, aims and objectives as stated in the Council Plan prepared
and adopted by Council under section 90 of the Act;
support collaboration and partnership opportunities, including through Collaborative Procurement
Arrangements;
provide guidance and achieve high standards of Probity, transparency, accountability and risk management;
and
enhance Council’s ability to obtain the best outcome from purchasing activities referring to a range of
considerations, including but not limited to environmental, financial, social Sustainability and support for
the local economy.
6. Scope
Procurement is the whole process of acquisition of external goods, services or works. It can include planning, design,
standards determination, specification writing, preparation of quotation and tender documentation, selection of
suppliers, financing, contract administration, disposals, and other related functions. This process spans the whole
life cycle from initial concept through to the end of the useful life of an asset (including disposal) or the end of a
service contract.
Procurement also includes the organisational and governance frameworks that underpin the procurement function.
This Procurement Policy represents the principles, processes and procedures that will be applied to all procurement
activity undertaken by Council. The application of this Procurement Policy commences when Council has identified a
need to procure goods, works or services, and continues through to the delivery of goods or completion of works or
services.
This Procurement Policy will apply to Councillors, Council Staff and all persons undertaking procurement on
Council’s behalf. Council must comply with this Procurement Policy before entering into a contract for the purchase
of goods or services, or the carrying out of works.
67. Policy non-compliance
Non-compliance with this Procurement Policy may result in a contravention of legislative requirements (including
contravention of the Act) and disciplinary action that could include dismissal. In addition, criminal and civil penalties
may be imposed if any Councillor or Council Staff act in contravention of any laws, including (without limitation)
laws regarding fraud, corruption, bribery or Australian competition and consumer laws. Refer to clause 18 of this
Procurement Policy for further details regarding the reporting of fraud or complaints.
8. Principles
Council will apply the following fundamental best practice principles to every procurement activity irrespective of
the value and complexity of that procurement:
Value for Money;
open and fair competition;
accountability;
risk management; and
Probity and transparency.
Council is also committed to reducing its environmental impacts, while generating benefits to the broader
community and economy. Council will seek to do this by:
encouraging the design and use of products and services that have been produced to ethical standards,
which have minimal impact on the environment and human health;
fostering a viable market for sustainable products and services by supporting business and industry groups
that demonstrate innovation in Sustainability; and
supporting suppliers that are socially responsible and adopt ethical practices.
9. Delegations
Any procurement spend with a value greater than $1,000,000 (excl GST) can only be entered into by a resolution of
Council.
For procurement spend below $1,000,000 (excl GST), Council will maintain and apply a scheme of procurement
controls and delegations for Council Staff authorised to make such procurement commitments in respect of goods,
services or works.
Council procurement processes will require authorisation from Council Staff with sufficient financial delegation
before Council enters into any binding contracts for the purchase of goods, services or works.
All purchase orders and invoices must have dual authorisation of expenditure, in accordance with the relevant
financial instrument of delegation before any payment is made.
10. Probity and ethics
Council’s procurement activities are to be performed in an open, transparent and ethical manner with
demonstrated integrity, fairness and accountability that meets relevant legal requirements at all times.
10.1 Conduct of Councillors and Council Staff
Councillors and Council Staff will at all times act in accordance with the Councillor Code of Conduct or the Staff Code
of Conduct respectively. They must perform their duties ethically and with integrity, and must:
treat potential and existing suppliers with equality and fairness;
not use their position to seek or receive personal gain in procurement matters;
maintain confidentiality of Commercial in Confidence Information;
7 present the highest standards of professionalism and Probity;
afford suppliers and prospective suppliers with the same information and an equal opportunity to
participate in a competitive procurement process, such as any tender or quote for goods, services or works
contracts;
be able to account for all decisions and demonstrate and provide evidence of the processes followed;
not perform any work, deliver services or supply goods under any Council contracts that those Council Staff
are supervising i.e. Council Staff cannot also work for the relevant supplier;
query incidents, decisions or directions that appear to contradict or deviate from Council’s standards of
ethics or Probity or established policies and procedures; and
ensure that this Procurement Policy is adhered to in relation to any expenditure of Council funds.
10.2 Councillors’ roles in procurement activities
The Councillors have a limited role in procurement activity and may be briefed on significant procurements during
the procurement process. The role of the Councillors includes providing a level of input during the project initiation
phase that will assist the responsible service units to achieve their intended outcomes and overall community
benefits. The Councillors may be briefed of the scope and intentions of a procurement via involvement in the major
projects advisory committee, Councillor bulletins, Councillor briefings or memoranda to Councillors.
In line with a Councillors’ obligations, including under the Act and the Councillor Code of Conduct, Councillors are
not permitted to form part of an evaluation panel or take on the responsibilities of a procurement sponsor, project
director, contract superintendent/manager or similar. The relevant procuring officer is wholly responsible for the
setting of evaluation criteria and criteria weightings. These criteria and weightings require endorsement by the
procurement sponsor and project director.
Strict probity requirements set in the planning stage of a procurement must be adhered to during the evaluation
and award stages of that procurement. Evaluation panel members must not disclose to any Councillors any element
of an evaluation process while submissions are under consideration, other than to provide timeline updates if and
when requested by the Councillors.
10.3 Conflict of interest
Councillors and Council Staff must at all times avoid situations which may give rise to an actual or perceived conflict
of interest. A conflict of interest may be a ‘general’ or a ‘material’ conflict of interest.
A member of Council Staff has a general conflict of interest in a matter if an impartial, fair-minded person would
consider that the person's private interests could result in that person acting in a manner that is contrary to their
public duty.
A member of Council Staff has a material conflict of interest in a matter if an affected person would gain a benefit or
suffer a loss depending on the outcome of the matter. The benefit or loss may be direct or indirect and pecuniary or
non-pecuniary. Affected persons include, among others, the member of Council Staff and their family members.
Any Council Staff or other person engaged to provide advice or services to Council, must disclose any general or
material interest before providing advice or reports.
In procurement matters, all Councillors and Council Staff (as the case may be) involved in any stage of the
procurement process, including (without limitation) the preparation of specifications, procurement or contract
documentation, the evaluation of responses, quotations or tenders, or the awarding of any contracts, must:
avoid conflicts of interest, whether material or general or actual, potential or perceived, wherever possible
(this includes the receipt of any gifts, benefits or hospitality, as further detailed in clause 10.6 of this
Procurement Policy);
complete and lodge a conflict of interest declaration in respect of the procurement;
observe applicable Council and government legislation and guidelines on how to prevent or manage any
conflicts of interest; and
8 immediately disclose any conflict of interest in accordance with the relevant legislation and Council
guidelines if they become aware of a conflict throughout the duration of the procurement activity.
10.4 Open and fair competition
All prospective suppliers must be treated fairly, with access to the same information to afford them an equal
opportunity to tender, submit a quotation or otherwise participate in a competitive procurement process.
Impartiality must be maintained in selecting suppliers to fulfil Council’s needs.
Council will provide open and honest feedback to suppliers who participate in any competitive procurement process
for Council’s business, subject to confidentiality of Commercial In Confidence information.
Any suspected improper conduct, including (without limitation) suspected fraud, corruption, substantial
mismanagement of public resources, risk to public health and safety, risk to the environment or other detrimental
action must be managed by members of Council Staff in accordance with Council’s internal policies and processes.
Refer to clause 18 of this Procurement Policy regarding the reporting of fraud and complaints for further details.
10.5 Probity, accountability and transparency
Accountability in procurement means being able to justify and provide evidence of the process followed. An
independent third party must be able to see clearly that a process has been followed and that the process was fair
and reasonable.
Council Staff must be able to account for all procurement decisions and ensure all procurement activities leave an
audit trail for monitoring and reporting purposes.
10.6 Gifts, benefits and hospitality
Under no circumstance should Council Staff or Councillors involved in the procurement of goods, works or services
seek or accept any immediate or future reward or benefit from a potential or actual supplier, regardless of value.
Any gift or benefit offered to a Councillor or Council Staff will be managed in accordance with Council’s internal
policies and processes.
Councillors and Council Staff, particularly contract supervisors must not knowingly:
visit a current supplier’s premises without invitation when acting in their official capacity; and
engage a Council supplier for private benefit, unless that engagement is on proper commercial terms.
Refer to clause 10.3 of this Procurement Policy for further details on how conflicts of interest are to be managed
and addressed.
10.7 Disclosure of information
To maintain transparency, evaluation reports that are presented to Council may publicly publish a successful
respondent’s price.
Council may publish a summary of awarded contracts via public reports or on Council’s website, including but not
limited to:
the contract number, title and type;
name of the successful supplier;
value of the contract; or
contract duration.
Subject to the Freedom of Information Act 1982 (Vic), the Act and any other relevant legislation, Commercial in
Confidence Information received by Council must not be disclosed and is to be stored in a secure manner.
Councillors and Council Staff must avoid references to current or proposed contracts in discussions with
acquaintances or outside interests.
9Discussions with potential suppliers during any tender, quotation or other competitive procurement process
evaluations must not go beyond the extent necessary to resolve doubt on:
the services, goods or work that Council is seeking to procure; or
what is being offered by that potential supplier.
At no stage should any discussions be entered into which could:
improperly influence the procurement process;
improperly influence the negotiation of a contract; or
have potential contractual implications,
prior to the contract approval process being finalised, other than authorised pre-contract negotiations.
Failure to maintain confidentiality of Commercial in Confidence Information is a breach of the Council Code of
Conduct.
10.8 Charter of Human Rights
Council will ensure that all of its procurement operations are consistent with the Victorian Charter of Human Rights
and Responsibilities Act 2006, including that Act’s fundamental rights.
11. Governance
11.1 Structure
Council will operate a centre-led procurement structure, wherein all strategy, policy, procedures, technology, best
practice and networking in procurement matters will be led by the Contracts and Procurement unit.
A Procurement Lead from the Contracts & Procurement unit will be allocated to provide assistance, oversight and
probity advice to Council Staff for all procurement activities with an estimated contract value greater than $150,000
ex GST.
Council's Procurement Guidelines and templates are available on Council's Intranet and have been developed to
provide assistance to Council Staff when undertaking procurement activities.
11.2 Controls
Council will maintain a framework of internal controls over procurement processes that will ensure:
more than one person is involved in and responsible for each procurement, end to end;
transparency in the procurement process;
a clearly documented audit trail exists for procurement activities;
appropriate authorisations are obtained, exercised and documented;
systems are in place for appropriate monitoring and performance measurement; and
a process is in place for escalation, where appropriate, of procurement matters (including procedural non-
compliance) to the relevant Director, EMT, the Audit and Risk Committee or Council itself.
11.3 Financial accountability
All Council Staff are to ensure that procurement approvals are in accordance with Council financial policies and
delegations, as determined by Council and the CEO under instruments of delegation. Responsibility for financial
management must be accepted and adhered to by Council Staff in undertaking any procurement activities. Council
funds must be used efficiently and effectively to procure goods, works and services and every attempt must be
made to contain the costs of the procurement process without compromising any of the procurement principles as
set out in this Procurement Policy.
10Council Staff must:
ensure the availability of funds within an approved budget must be established prior to the commencement
of any procurement;
not authorise the expenditure of funds in excess of the applicable financial delegation for their position
(delegated level of authority);
not authorise or write multiple purchase orders to avoid the authorisation process requirements or
circumvent their procurement or financial authority;
not approve expenditure that relates to them personally – any expenditure of this nature must be referred
to the next higher level of authority for approval; and
consistent with clause 12.4 of this Procurement Policy, ensure that any purchase orders are generated at
the point where the commitment to purchase goods, services or works has been made i.e. a purchase order
must be raised in the relevant systems (as updated and which at the time of publication of this Procurement
Policy, is Technology One) when the goods, services or works are ordered and not when an invoice is
received by Council.
11.4 Internal compliance reporting
Appropriate performance measures and reporting systems must be used and followed to monitor performance and
compliance with procurement policies and procedures. This will include but not be limited to regular review of
contract variations (as further discussed at clause 12.8 of this Procurement Policy) and compliance with this
Procurement Policy.
Material Breaches of this Procurement Policy must be reported as soon as practicable to the relevant Director and
CEO, and periodically to the Audit & Risk Committee. See clause 7 of this Procurement Policy regarding non-
compliance.
12. Procurement thresholds
For the purposes of assessing procurement thresholds under this Procurement Policy, estimated contract values
must be inclusive of reasonable contingency allowances and optional contractual extension periods. Consideration
should also be given to the total cost of ownership over the lifetime of the procurement, including but not limited to
quality, reliability, risk, sustainability and delivery considerations. Due diligence must be exercised to ensure that
realistic assessments are made of all factors which may impact the value of a contract.
Contracts must not be split to avoid proper process or circumvent the requirements of this Procurement Policy.
12.1 Contract value thresholds and procurement requirements
Section 108 of the Act details that each council will set the contract value above which tenders or expressions of
interest for contracts must be invited. The Regulations may also set contract value thresholds above which Council
must invite a tender or seek an expression of interest. As at the date of this Procurement Policy, no such thresholds
have been set in the Regulations.
Subject to an exemption set out in the table at clause 12.2 of this Procurement Policy, a public Tender Process or
expression of interest process, must be used for all procurements valued at $300,000 (excl GST) and above for
goods, services or works.
A competitive procurement process may also be called for the purchase of goods, services or works where the
estimated expenditure is below the designated threshold but a particular competitive procurement process would
assist in achieving a Value for Money outcome.
Except where Council believes a competitive procurement process should be called for (as contemplated
immediately above in this clause 12.1), for procurements under $300,000 (excl GST), the procurement requirements
detailed in the following table will apply according to the applicable estimated Contract Value:
11Estimated contract value Procurement requirement
(excl of GST)Exemption type Explanation, limitations, responsibilities and approvals
Contract variations (that are See clause 12.8 for further details regarding the procurement procedure to be
not in effect new contracts) observed for contract variations.
Where the initial contract was entered into in compliance with the Act and Council’s
Novated contracts procurement policy and due diligence has been undertaken in respect to a new
prospective supplier.
Information technology Allows Council to renew software licenses and maintenance and support, or upgrade
resellers and software existing systems, where there is only one supplier of the software, who holds the
developers intellectual property rights to the software.
Situations where a Regional Waste and Resource Recovery Group constituted under
Regional Waste and Resource the Environment Protection Act 1970 had already conducted a public Tender Process
Recovery Groups for and on behalf of its member councils.
Where a lessor leases an asset (generally a vehicle or plant and equipment) to Council
Operating leases and assumes the residual value risk of the vehicle.
For goods, works or services less than $20,000 ex GST, where a Social Enterprise is
Social Enterprise directly engaged. (Refer to clause 15.3 of this Procurement Policy). Council must still
be able to demonstrate Value for Money in the course of the procurement process.
Statutory compulsory monopoly insurance schemes, ie Workcover, motor vehicle
compulsory third party.
Other statutory bodies such as water supply, electricity connections.
Legislatively required services, such as Aboriginal Land Council.
Proven monopoly or
specialised market When supply of goods, services or works can only be sought from a monopoly
supplier, for example the marketplace is restricted by a statement of licence,
technology or third-party ownership of an asset (ie telecommunication pits).
If there are few suppliers for the goods, services or works being sought or where
the work is highly specialised.
Subscriptions
Memberships
Medical
Advertising
Other
Postage and delivery charges
Tolls and cab charges
Loans
Creative endeavours such as stage shows, bands, performers
13In addition to the listed exemptions, the CEO may grant an exemption from seeking responses via a competitive
procurement process, such as tenders or multiple quotations, when it can be demonstrated that:
• it is in the public interest;
• Council is still obtaining Value for Money in the process adopted; and
• the process is defensible and able to withstand internal and external scrutiny – one which achieves both
accountability and transparency.
Prior to seeking approval for any exemption, advice must be sought by Council Staff from the Contracts and
Procurement unit who will review the total cumulative spend with that prospective supplier, and ensure that the
justification requirements for the exemption have been met.
Use of any of the listed exemptions must be endorsed by the appropriate Director and the Contracts and
Procurement unit.
12.3 Procurement during an Emergency
Where an Emergency has occurred, Council’s CEO may authorise procurements without the need for a competitive
procurement process where the CEO is of the opinion that delays in obtaining and analysing quotations or similar
would unduly frustrate any response to the Emergency.
Once the effects of the Emergency have passed, all further procurement should be in compliance with this
Procurement Policy, the Act and other relevant legislation.
For the purposes of this clause 12.3, an Emergency is defined as a sudden or unexpected event or occurrence
requiring immediate action and includes:
the occurrence of a natural disaster, hazard , flooding or fire event at or in relation to Council property or
Council’s municipality;
the unforeseen cessation of trading of a business critical service provider; or
any other situation which is liable to constitute a risk to life, health, well-being or property.
12.4 Purchase order requirements
The purchase of goods, works and services must be acquired under an official purchase order that documents the
type of services, items, and/or quantities and agreed price.
The purchase order must be raised before any commitment is made to purchase goods, works or services from a
supplier in the relevant systems (as updated and which at the time of publication of this Procurement Policy, is
Technology One). In other words, the purchase order must be raised when the goods, services or works are ordered
and not when an invoice is received by Council
The purchase order must clearly and explicitly communicate Council’s requirements. Once accepted by the supplier,
the purchase order is binding on both Council and the supplier and any procurement spend is limited by and must
not exceed the purchase order.
12.5.1 Exemptions from raising Purchase Orders
The Contracts and Procurement unit will maintain a listing of expenditure types that are exempt from the
requirement to raise a purchase order. These exemptions may be revised from time to time in consultation with
EMT and Council’s Audit & Risk Committee.
12.6 Probity planning
A probity plan is required where the value of the procurement is greater than $5 million (excl GST) or where the
procurement is considered sensitive, complex, or high risk (Probity Plan).
The Probity Plan is to be reviewed and approved by the relevant Director and relevant Procurement Lead.
14The Probity Plan must identify whether a Probity advisor and/or Probity auditor needs to be engaged for the
procurement process.
In the event a Probity auditor or advisor is appointed, such appointment should be made before the competitive
procurement process specifications and documentation are completed.
12.7 Cumulative spend thresholds
Council will monitor and report on cumulative spend with suppliers at least annually. If expenditure with a supplier
or a number of suppliers providing similar goods, services or works is ongoing in nature and the cumulative spend is
likely to exceed the public tender or EOI expenditure threshold over a rolling two year period, then Council will
review the opportunity to pursue a contract for the aggregated purchase of such goods, services or works through a
competitive procurement process.
Expenditure that was procured through a competitive process may be excluded from the cumulative spend analysis.
12.8 Contract variations
Contract variation expenditure may be exempt from the procurement procedure described in clause 12.1 if the
variation:
• forms part of an existing contract; and
• in itself does not change the contract to such an extent that it could be deemed that a new contract has
been established.
If the contract variation:
• is so extensive that the variation would be deemed a new contract, then a competitive procurement
process may be required as set out in clause 12.1; and
• is a genuine variation and would not be deemed a new contract, then the procedure described below in
clause 12.8.1 can be followed.
All contract variations must be assessed to determine whether they are properly characterised as variations or
whether they are in effect a new contract. This will depend on factors like:
• the monetary value of the proposed variation, i.e. the value of the variation in the context of the
thresholds fixed by this Procurement Policy at clause 12.1; and
• the subject matter of the proposed variation, and whether it is consistent with the scope of the original
contract.
Council Staff should be cautious in readily determining that a contract variation is not a new contract, in order to
minimise the risk of investigation into Council’s processes (including by the Local Government Inspectorate),
reputational damage to Council or complaint by dissatisfied and unsuccessful suppliers. Council Staff should seek
guidance from the Contracts and Procurement unit when considering contract variations.
12.8.1 Approving contract variations
Variation Type 1: Significant Contract Variations
The cumulative value of all proposed variations is greater than 20% of the Original Contract Value (or
greater than the approved contingency budget, whichever is the lower)
Variation detail Approved by
EMT in accordance with the Capital Works
Contracts approved by Resolution of Council
budgeting review process
Cumulative variations greater than $300K (ex GST) CEO
Cumulative variations less than $300K (ex GST) Director
15Variation Type 2: All other Contract Variations that are not Type 1
Variation detail Approved by
The variation is within the approved budget(s) The Revised Contract Value must be within the
for the contract, and cumulative variations do approving Officer’s financial delegation.
not exceed the original contract sum by more
than 20%
Onsite and minor variations Contract Superintendent / Superintendent’s
Low risk variation – the variation approval is Representative /Contract Manager with sufficient
required to ensure that there are no financial delegation
unnecessary interruptions or delays to the NB - all variations are to be reported to the
works or services; and appropriate financial delegate for the revised Contract
A written quote has been received Value as soon as practicable.
13. Procurement processes
Council’s standard methods of procurement include:
• purchase (Credit) cards;
• payment cards (ie Bunnings, Coles, fuel);
• purchase Order / Quotation;
• request for quotation;
• request for tender;
• request for proposal; and
• expressions of interest.
13.1 Public notice and communication
All public tenders or similar competitive procurement processes invited by Council will be published via Council’s
eTendering Portal and may be advertised in the media.
The eTendering Portal will also be used to provide access to public documentation (during the relevant open
period), including without limitation, addenda, contract award information, guidelines for doing business with
Council, Council standard terms and conditions and standard drawings and civil specifications (as the case may be).
13.2 Market engagement
Council recognises that in order to aim to achieve sustainable outcomes and Value for Money, a strategic
assessment of the appropriate approach to market should be undertaken to determine whether to approach the
market directly, participate in regional or sector wide Collaborative Procurement Arrangements, access aggregator
or State Government contracts or use other means.
Council will consider supply arrangements that are more likely to deliver the best value outcomes in terms of time,
expertise, cost, Value for Money and quality, as such lowest price is not necessarily the sole determinate of selecting
a supplier.
Suppliers will be encouraged as reasonably possible to compete for Council work and services. Where appropriate,
Council will encourage new suppliers for categories that have low competition.
Council will also carefully plan how it packages its requirements for significant goods, services and works by
considering the market landscape (competitiveness, market size and Local Supplier capabilities) so as to maximise
competition and optimise the best Value for Money outcome for Council.
Council recognises the importance of effective and open working relationships with its suppliers and is committed to
developing and managing supplier relationships by establishing contracts that set reasonable and fair expectations
for suppliers.
1613.3 Specifications / project brief
Specifications used in procurements must aim to inform bid and quotation requests. They should aim to accurately
detail the services, works or goods required in order to ensure that submissions received address Council’s
requirements.
Well drafted specifications greatly assist when evaluating submissions as they allow a clearer comparison between
offers received. Specifications will be incorporated into the contracts and therefore should be written in a manner
that:
• sets out the performance and functional requirements;
• clearly describes what Council wishes to procure;
• ensure impartiality and objectivity;
• encourage the use of standard products;
• encourage sustainability; and
• eliminate unnecessarily stringent or market restricted requirements.
13.4 Late responses
Council will not accept late responses to any competitive procurement process under any circumstances.
13.5 Evaluation criteria for Value for Money
Council’s procurement activities will be carried out on the basis of obtaining Value for Money, taking into account
both financial and qualitative factors, including but not limited to:
mandatory criteria;
financial cost to Council;
capacity of respondents to provide the goods and/or services and/or works;
capability of respondents to provide the goods and/or services and/or works in accordance with Council’s
requirements;
community benefit, including local, social, economic and/or environmental Sustainability;
quality; and
previous experience and past performance.
13.5.1 Minimum criteria weighting
All procurements for goods, services or works of value equal to or greater than $150,000 (excl GST) must include the
following evaluation criteria:
Criterion Minimum Weighting
Financial Cost to Council 30%
Community Benefit 10%
The weighting for these criteria may only be varied or excluded with approval from the relevant Director prior to
issuing any competitive procurement documentation, such as quote or tender documentation.
1713.5.2 Mandatory criteria
Council Staff should consider inclusion of mandatory (pass/fail) criteria including, but not limited to:
occupational health and safety;
insurances;
licences / qualifications;
Child Safe Standards;
applicable legal requirements;
applicable standards or industry best practice; and
accreditation with professional bodies or Australian Standards certifications.
13.6 Evaluation of tenders and EOIs
All evaluation processes must be transparent, robust, systematic, well-documented and unbiased.
An evaluation panel will be established to evaluate each submission against the selection criteria. Evaluation panels
can include external personnel in order to ensure the best outcome (including in respect of Value for Money) for a
procurement activity and must comprise at least 3 persons as well as a chairperson.
A detailed evaluation plan must be developed, approved and strictly adhered to by that evaluation panel. Amongst
other things, the evaluation plan involves the establishment of more detailed evaluation criteria (i.e. than those
published with the competitive procurement process) and the application of a pre-approved and robust weighted
scoring system.
The evaluation plan must be completed and signed-off prior to the relevant competitive procurement process being
issued.
13.7 Confidentiality
All information related to a procurement activity should be considered Commercial in Confidence Information.
Council Staff must take proper and adequate precautions at all times to preserve the confidentiality of all
proprietary, financial and Commercial in Confidence Information.
Evaluation panel members are required to sign a Council conflict of interest declaration and confidentiality deed
acknowledging their understanding of their requirements to protect Commercial in Confidence Information from
unauthorised access or use.
Submissions for any competitive procurement process will be maintained by the Contracts and Procurement unit,
registered in Council’s records management system and access only provided to members of the relevant evaluation
panel after completion of Council’s conflict of interest declaration and confidentiality deed.
With the exception of senior officers of Council and requests in accordance with the Freedom of Information Act
1982 (Vic), only persons on the relevant evaluation panel have a need to view any applicable documentation
received from respondents to a competitive procurement process.
Security procedures for Commercial in Confidence Information must include the following:
only those individuals with a direct need are to be granted access to procurement related information;
document security must be observed, both physical (eg locked cabinets) and electronic (eg password
protected);
only limited copies of submissions should be produced;
all documents and correspondence that are unnecessary for project files should be disposed of securely (eg
shredded or security bins); and
a ‘clean desk’ policy must be adhered to and all files that are not securely disposed of must be locked away
when not in use.
1813.8 Shortlisting and negotiations
Council may conduct a shortlisting process during a competitive procurement process, such as an EOI, tender or
quotation processes. Shortlisting can be based on any criteria but only in pursuit of the most advantageous outcome
for Council. Council may shortlist one or more respondents.
Shortlisted respondents may be invited by Council to submit further information which includes submitting a best
and final offer in relation to all or certain aspects of their respective submissions.
Once one or more preferred respondents are selected, negotiations can be conducted in order to obtain the optimal
solution and commercial arrangements, within the original scope and intent of the competitive procurement
process. Probity requirements apply to all negotiations.
13.9 Award of contract
The value of the procurement activity will determine the relevant financial delegate to consider and approve (or
otherwise) the relevant evaluation report.
The approving financial delegate cannot change the recommendation of the evaluation panel as to the preferred
respondent. That is, if the approving financial delegate does not agree with the findings of the evaluation panel,
they cannot make a substitute decision as to which respondent will be awarded the contract. Awarding a contract
without the application of the applicable evaluation criteria may amount to engaging in misleading and deceptive
conduct, breach of a ‘process contract’ or misuse of a delegation and could give rise to (amongst other adverse
consequences) legal action being brought by dissatisfied respondents.
The approving financial delegate can reject a recommendation, on the basis that the delegate is not satisfied that
the process undertaken was compliant with this Procurement Policy. Additional information can be sought by the
approving financial delegate from the evaluation panel to clarify the analysis that was undertaken.
If the approving financial delegate determines that the evaluation was flawed, the evaluation panel may be asked to
undertake a more thorough assessment against the published criteria and report back to Council. An approving
financial delegate may reject a recommendation and stop the competitive procurement process. This may only be
done with due consideration of the operational and reputational cost of taking this action and only when halting the
competitive procurement process is in the best interests of Council.
In order to limit the occurrences of halting a competitive procurement processes at the award stage, Councillors are
to provide input on the initial planning stage, as contemplated in clause 10.2 of this Procurement Policy, to ensure
that the resources committed to the competitive procurement process are best used and that the scope of a project
is adequately determined prior to going to market.
Council’s Delegations and Authorisations Policy applies to the awarding of contracts (i.e. the decision). The actual
writing and signing of subsequent acceptance letters and the signing of contracts is simply an administrative task.
13.10 Panel arrangement
Council may appoint a panel of suppliers as the result of a competitive procurement process, in an annual supply or
panel arrangement.
Once a panel arrangement is established, this is a continuing offer by one or more suppliers to provide specified
goods, works or services for a predetermined length of time, usually at a predetermined unit rate, and in accordance
with pre-agreed terms and conditions.
When obtaining goods or services from suppliers on these panels, Council is not obligated to seek public tenders,
quotations or similar, however quotations from one or more of the panellists may be obtained on a job-by-job basis
(subject to the terms of the contract) to promote competition, retain competitive tension and obtain Value for
Money.
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